Kansas City, St. Louis voters renew cities’ earnings taxes

Voters in Missouri’s two biggest cities overwhelmingly renewed a decades-old earnings tax for the second time in five years, siding with their mayors, who warned that losing the hundreds of millions of dollars in yearly revenue could be ruinous.

The tax requires those who work in Kansas City or St. Louis to pay a 1 percent tax on their pay. Because nonresidents also must pay, thousands of commuters from the neighboring states of Kansas and Illinois are affected.

In Kansas City, according to complete but unofficial results, 77 percent of Tuesday’s ballots cast favored reauthorizing the tax, consistent with the approximately 3-to-1 margin of 2011. Seventy-two percent of St. Louis’ ballots signed off on the tax, down from the 88 percent of that city’s voters who backed it five years ago.

Though state law mandates that voters revisit the matter in another five years, mayors in both cities heralded Tuesday’s outcome.

“Enjoy this,” Kansas City Mayor Sly James told supporters at the city’s iconic Union Station. “We still have fights to have. We’re gonna come together when we need to and we’ll fight off anybody who tries to tell us how to run and operate our lives and our city.”

“City voters rejected a very dangerous gamble with our public safety and credit rating,” St. Louis Mayor Francis Slay added in a statement from across the state. “The people who helped win tonight — as grassroots as you can get — are now poised to do even more great things.”

A rationale behind the tax is that those who work in the cities but don’t live in them still benefit from the municipalities’ police and fire protection, parks and streets — services that supporters pressed would be devastated if the tax went away.

Kansas City generates $230 million a year from the tax, roughly 40 percent of the city budget, while the tax accounts for $164 million, one-third of the operating budget, in St. Louis. Kansas City voters approved a half-percent earnings tax in 1963 and agreed to raise it to 1 percent in 1970. St. Louis’ 1 percent tax has been in place since 1959.

Opponents — most visibly the “Vote No on the E-Tax” campaign largely bankrolled by St. Louis mega-donor Rex Sinquefield — countered the tax is unfair and drives businesses and workers to the suburbs. Eliminating it, they pressed, would force the cities to weed out fraud, waste and redundant services.

A message seeking comment through that group’s website Tuesday night was not immediately returned.

Voter rejection of the tax would have phased it out over a decade by one-tenth of a percent each year — to critics, plenty of time for the cities to find ways to compensate.